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Longview Company is considering automating its manufacturing facility. Company information before and after the proposed automation follows:

Before Automation After Automation

Sales revenue————–$194,000 ————- $194,000

‘ Variable cost————–108,000—————-40,000

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Contribution margin———-$86,000 ————–$154,000

‘ Fixed cost——————15,000—————–64,000

Net income——————-$71,000—————–$90,000

1: Calculate Longview’s break-even sales dollars before and after automation. (Round your contribution margin ratio to 4 decimal places and final answers to 2 decimal places. Omit the “$” sign in your response.)

Break-even sales dollars before automation:$__________

Break-even sales dollars after automation:$__________

2: Compute Longview’s degree of operating leverage before and after automation. (Round your answers to 4 decimal places.)

DOL before automation:__________

DOL after automation:__________


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